Country Report Singapore November 2009

Summary

Given that the political opponents of the ruling People's Action Party (PAP) are weak and subject to repression, the PAP is expected to maintain its stranglehold on power in 2010-11.
The government will rely on a policy of fiscal expansion to engineer a sustained recovery in domestic demand in the forecast period. Its reserves are plentiful, enabling it to raise spending.
Owing to the likelihood of a rise in inflationary expectations, monetary policy is expected to be tightened in 2010 through a steady appreciation in the value of the Singapore dollar.
Singapore's economy is forecast to rebound in 2010 from a recession in 2009. The Economist Intelligence Unit forecasts that the economy will grow by an average of 4% a year in 2010-11, after an estimated contraction of 2.7% in 2009.
Following a period of deflation in the second half of this year, consumer prices are expected to increase by an average of 2.2% a year in 2010-11, reflecting the effect of rising global commodity prices relative to 2009.
Stronger domestic demand will lead to a slight deterioration in the trade balance in 2010, but Singapore will continue to post significant surpluses on the trade and current accounts in 2010-11.

The government has now ridden out the worst of the economic downturn, and there is no longer any suggestion that the electorate will be called to the ballot box ahead of schedule.
The Monetary Authority of Singapore (the central bank) decided against making any changes to monetary policy when it released the second of its biannual policy statements for 2009 on October 12th.
Reflecting its concerns over the strength of the recovery in the domestic economy, the government has decided to extend by six months a job credit scheme that it first announced in January.
A recovery in manufacturing underpinned Singapore's economic growth in the third quarter of 2009. According to the government's advance estimates, real GDP expanded by 0.8% year on year in July-September.
Singapore recorded a sixth successive month of deflation in September, when the consumer price index fell by 0.4% year on year owing to depressed domestic demand and lower prices for global commodities.
Singapore's property market recovered in the third quarter of 2009, according to the Urban Redevelopment Authority (the official land-use agency).

Source: Country Report

This report covers the following industry codes:
SIC Code: 60;89;1;65
NAICS Code: 52;81;11;53